Airline outlook: Less turbulence, more profit

The financial performance of Chinese airlines improved in the third quarter as passenger traffic rose and fuel prices declined.

While Air China's profit of 4.48 billion yuan ($719 million) from operations in the third quarter was a drop of 17 percent compared with the same period in 2011, the decline was much lower than the first half of the year, when revenues fell some 74 percent, according to a report released by the carrier on Oct 26.

The revenue decline posted by China Southern Airlines slowed from an 83.7 percent drop in the first half to 29.2 percent in the third quarter, the airline said on Oct 28.

"China's domestic travel resurgence continued with an 11.4 percent rise in demand (in September) over a year ago," said the International Air Transport Association.

This improvement is in line with recent data on industrial production and consumer spending, all of which show increases, IATA said in its report.

Statistics from the Civil Aviation Administration of China show that the passenger and air freight transport totaled almost 5.4 billion ton-kilometers in September, more than the 5 billion reported in the first six months of 2012.

Airlines usually register stronger figures in the second half due to the summer vacations and end-year busy seasons, said Li Xiaoji, a professor of the Economic and Management School at the Tianjin-based China Aviation University.

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